Accounting 101: How many accountants does one company need?

Accounting is a broad field full of professionals with different specialties that complement one another. There are more than a few kinds of accountants in this world, and here are three that are likely close to your business:

• The tax accountant. Whether sole proprietors or working at accounting firms, these CPAs are great at tax law. They’ve got to be – the rules change each year.
• The auditor. In an accounting firm, they have a solid handle on accounting regulations and are pros with GAAP. They proficiently produce a full set of financials with footnotes.
• The accountant at your company. Referred to in the profession as accountants in “Business & Industry,” these accountants manage a company's day-to-day accounting tasks, serving as CFO or Controller. It’s likely they also run the back office, including human resources, facilities, insurance and IT.

What helps differentiate these types of accountants are the cycles on which we operate: be kind to the tax accountant during tax season (January to April, August to October); auditors audit after the year is closed, which keeps them busiest January to March; the accountant at your company follows your cycle: month-end close, quarterly bank deadlines and annual budgets.

Tax accountants are the only ones who should do your taxes.

You wouldn’t want your CFO doing your taxes, just like you wouldn’t have your tax accountant auditing your financials or creating your annual budget. Tax accountants (and we recommend you only work with a CPA) are certified on the tax laws and strategies that keep your business compliant with minimal taxes. They know about tax laws in multiple jurisdictions and the ways to protect yourself from problems down the road.

Your auditor knows what to look for.

You know you’ve hired the right auditor when they are sharing with you accounting best practices specific to your industry. Hire an auditor when necessary, but make sure they have experience in your industry. Don’t look to them to help you run the day-to-day operations of your business, help with personnel decisions, or help leverage your vendors. These auditors have seen a lot and will help you see things you have not seen before. Audits can be stressful, but with the right attitude you’ll come out stronger on the other end.

Your company accountant.

At some point, the bookkeeper supporting you will no longer be the right value; you’ll need an accountant on your team. This accountant should help create the financials that tell stories about what you’ve learned from previous years and forecast about where you’re going.

There are a lot of resources out there for you to consider when you want to make the move: do you want an employee or contractor? A full-time or part-time position? Three or 15 years of experience? Just remember that as you wouldn’t hire an IT help desk pro to build your website or a handyman to do your electrical work, you'll want to find a professional accountant with experience in your industry. And call on your outsourced CFO to help make the decision that’s best for you.